US DOT May Propose Capping Fuel Economy at 2021 Level Through 2025

The U.S. Department of Transportation is considering issuing fuel economy requirements for automakers lighter than the Environmental Protection Agency’s version.

DOT said Tuesday that the new rules may start a year earlier than planned in the EPA’s proposed rules, covering 2021 model year vehicles. Lower fuel economy increases through 2025 would be part of the new plan, the agency said, with average fuel economy capped in 2021 through 2025 being an option under consideration.

President Donald Trump put on hold phase two rules approved by EPA in the final days of the Obama administration. He reinstated the review into April 2018, and said his administration could opt to freeze 2021 standards through 2025.

The Obama administration had negotiated with automakers in 2011, with agreement reached on doubling corporate average fuel economy to about 50 miles per gallon by 2025. That would equate to the high-30s in mpg using real-world window sticker prices.

The Alliance of Automobile Manufacturers wants to make sure that all the facts are reviewed before the federal standards are finalized next year.

The trade group that represents General Motors, Volkswagen, Toyota, and other automakers, said that the environmental review “must happen regardless of what future standards are.”

Data would include “facts need to drive public policy, including data on consumer sales, gas prices and costs of technology” to realistically assess the standards, the trade group said.

For several months, the DOT’s National Highway Traffic Safety Administration has indicated it will likely take a more cautious approach to how the fuel economy standards are actually enforced.

The agency also said it is considering giving automakers additional flexibility for prior model years to meet requirements.

“I don’t think they’d completely eviscerate those regulations. But there are probably ways to make them more flexible and reduce the cost,” said Jeff Holmstead in February. The former assistant administrator at the EPA, now a partner at Bracewell LLP in Washington, was commenting about NHTSA enforcing EPA rules.

Federal rules require NHTSA to set “maximum feasible” fuel economy requirements. The law also requires the agency to consider “technological feasibility, economic practicability… and the need of the United States to conserve energy.”

The White House has been receiving input from automakers on the standards recently, officials briefed on the matter said.

Other groups, such as environmentalists, are frustrated they’re not having as much say in the matter.

Freezing the fuel efficiency standards could “hurt the American people just to pad the pockets of big oil and auto executives,” Sierra Club’s Andrew Linhardt said to Reuters.